Legal Organization

sign-pen-business-document-48148The legal organization of your business has a big impact on your legal and tax responsibilities. Information on the basic structures of businesses is all over the internet—namely at the website of the Small Business Administration—so I won’t repeat it here, but I would recommend paying for professional legal and tax advice, at least to get set up and establish procedures consistent with the responsibilities of your business’ organization. Just to get you started, I’ll mention some basic choices.

First, you need to decide whether you’re going to operate as:

  1. a Sole Proprietor, i.e. just you yourself doing business as yourself, e.g. “I’m Horace Flak and I fix computers,” or
  2. a Sole Proprietor doing business under a business name, “I’m Horace Flak and I fix computers as ‘Roman Systems'” or
  3. incorporate.

If you incorporate, you then have to choose a corporation (INC),  a limited liability corporation (LLC), or limited liability partnership (LLP.) Then you’ll have to choose how you’ll be taxed: as a sole proprietor, a partnership, a C-corp, or S-corp.

Again, the Small Business Administration’s site is a good place to start investigating your options. Online legal services can advise you on what’s best for your business, but you may want to seek more precise advice so that you not only organize your business well, but you choose a business structure that works for you alongside your other business, personal, legal, and accounting arrangements.

Once you’ve decided on your legal organization, you’ll be able to proceed with the necessary document preparation, filing, and registrations that will ask you about your business structure.


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